CIB's deficit is a state problem, not a local one

April 20, 2009

Everyone knew it would come to this.

When the need to shore up the city Capital Improvement Board's finances became clear, it didn't take a crystal ball to predict where most of the money would come from: Marion County. The whole region--indeed, the entire state--benefits from the jobs and tax revenue generated by the venues CIB operates, but hard times stop at the county line.

That sentiment is no secret, but it became apparent in this case shortly after State Sen. Luke Kenley--one of the few to even suggest how to tackle CIB's $47 million shortfall--forwarded a proposal that relied on various tax increases, including raising the alcohol tax statewide. The Noblesville Republican's plan, particularly the statewide nature of the alcohol tax, drew a lot of heat.

It didn't take long for Kenley to retreat, restricting the alcohol tax hike to Marion County. Mayor Greg Ballard's proposal was similar to Kenley's and equally politically expedient, focusing most of its attention on Marion County taxes.

A bill that mirrors Ballard's plan was passed by the full Senate shortly before IBJ deadline. It would give the county the authority to raise alcohol, hotel, rental car and ticket taxes to make up CIB's shortfall. It also would expand the city's Professional Sports Development Area to include the new JW Marriott Hotel complex, which would divert to CIB state sales tax revenue generated by the hotel.

The fate of the CIB bailout bill likely won't be known until shortly before the Legislature adjourns April 29. We assume it will be part of the horse-trading involved in passing a state budget and that Gov. Mitch Daniels will play a big role in the outcome.

The governor gave his take on the CIB budget emergency early in the process when he said it's a local problem that requires a local solution, perpetuating the wrongheaded notion that the fates of the various communities within a given region aren't intertwined and feeding the Indianapolis-vs.-the-rest-of-the-state mentality that's all too prevalent at the Statehouse.

We know it's politically unpopular to come to the financial rescue of Lucas Oil Stadium, Conseco Fieldhouse, Victory Field and the Indiana Convention Center, the venues CIB maintains, because they're in Indianapolis.

But to cast the CIB's deficit as an Indianapolis problem is simplistic and inaccurate. It overlooks the millions of dollars in state tax revenue generated by those venues and an endless list of vendors that do business with them.

We suspect the higher taxes that are almost certainly coming the city's way won't scare away the paying customers that make the region's hospitality industry so important to the state. At least we hope not. Regardless, the tone of the debate has been a setback for the idea of regionalism.

Restructuring CIB to give multiple counties in the region a say in how it's operated might plant the seed for greater cooperation in the future. One way or another, they must own up to the stake they have in Marion County's future or its economic engine will someday grind to a halt.
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